Marijuana clubs test limits of embattled Arizona medical pot law

You could soon have a marijuana club down the block or around the corner. An entrepreneur in the state’s nascent medical marijuana industry has found what he believes is a loophole in the law that restricts the distribution of the drug to just 125 specially licensed dispensaries. Allan Sobol already has opened his first club in north Phoenix and has plans with his business partners to expand elsewhere.

But the exception Sobol has found means more than the possibility of these clubs showing up in every strip mall. It also gets around the fact that health officials are refusing to even accept applications for those who want to operate one of those limited number of heavily regulated dispensaries. The move has not gone unnoticed by state Health Director Will Humble. He is asking the Arizona Attorney General’s Office to investigate whether these clubs are little more than thinly disguised places where marijuana is being sold illegally.

Sobol, however, said he is unconcerned. In fact, he told Capitol Media Services he would welcome a court challenge. “We’ll win,’’ he said.

The voter-approved law allows anyone with a doctor’s recommendation to obtain a state-issued card allowing the purchase of up to 2 1/2 ounces of marijuana every two weeks from a state-licensed dispensary. It also permits cardholders to grow their own if they are at least 25 miles from an outlet. Humble, after consulting with Gov. Jan Brewer, decided in May not to even take applications for the dispensaries until a federal judge decides whether Arizona can implement its law despite federal statutes making possession, sale and distribution of the drug a felony. And of the 7,570 patient applications already approved, 6,067 have state permission to cultivate.

Where Sobol comes in relates to a little-known provision of the law that allows one certified patient or caregiver to give marijuana to another “if nothing of value is transferred in return.’’ That is the model of the Arizona Compassion Association, a nonprofit corporation that gives away samples that are donated by patients who have grown more than they need or have given the association the right to grow on their behalf.  The only thing is, you have to belong to Sobol’s 2811 Club — so named for the section of law dealing with giving away marijuana — to get access to the association and its free marijuana. And that requires paying a fee.

The cost to get into one of the largest, the 2811 Club in north Phoenix, is $75 each time, or $700 annually. And that has gotten Humble’s attention. “They’re using a shell game to make it appear that nothing of value has exchanged,’’ he said. Sobol said that’s not the case.
He said the fees pay for everything from the building security and staff to the classes on growing marijuana that are free for members. Those fees, he said, also pay for testing and grading the marijuana.

But it is more complex than that. Sobol acknowledged that his company does make donations to the nonprofit organization. And he said that organization, in turn, can legally reimburse growers for their costs, like the purchase of hydroponic equipment, though he said growers cannot charge for their time and labor. “I’m not a lawyer,’’ Humble said. “But on its surface, to me it looks like it very well could be an illegal transaction.’’ So far, though, Phoenix police do not appear concerned. Sobol said several officers showed up to check the place out, hear his description of the operation and went away, apparently satisfied.

Humble said even if this concept of a marijuana club is not a crime, this kind of operation may be beyond what the medical marijuana law anticipated. “In fact, something of value has been exchanged,’’ he said. The samples are not large, running about three grams — slightly more than a tenth of an ounce. But this isn’t your mother’s marijuana, with the psychoactive ingredient running into the 15-plus percent range, far above the 1 to 3 percent stuff available in the 1960s. So it doesn’t take much to get the same effect.

The resolution of the legal issues Humble is raising will determine whether marijuana clubs could be sprouting up all over the state. Under the voter-approved measure, there is a limit of one dispensary for each 10 pharmacies in the state. That computes out to 125. Humble’s agency has decided to spread those out among each of the health planning districts, which are roughly divided by population. The law also permits cities and counties to enact “reasonable zoning restrictions’’ to limit where dispensaries can be located.

Several communities have limited these operations to specific industrial or commercial zones. And there also are requirements that keep them a certain distance from schools and churches. But Sobol has his business classified as a school, based on the classes that are offered there. That escapes all the other zoning requirements, allowing clubs to operate anywhere a school can be established. Sobol said even if Humble’s agency eventually starts licensing dispensaries, the clubs are likely to multiply because of the advantages to operating that way.

The concept of marijuana clubs is not the only way Sobol is testing the limits of the law. Under the terms of the statute, anyone with permission to cultivate for self-use can grow up to 12 plants at any one time. But Sobol said someone with a medical marijuana card and the right to grow is entitled to assign that right to another patient or a designated state-licensed caregiver. Caregivers, in turn, can provide for the needs of up to five patients. That means growing 60 plants at a time — 72 if the caregiver also is a patient.

Sobol said members of his club are told of their option to designate that right to the Arizona Compassion Club, which then finds qualified individuals to each grow 72 plants — marijuana that eventually finds its way onto the shelves in the sample bottles.

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